"Both measures announced today are far reaching - but they are just the start, not the end.

"They will ensure real progress is made in the first year of a three-year strategy to restore profitability, deliver positive cash flow, improve services and make the business a better place in which to work."

Consignia plans to transfer its universal parcel service to Royal Mail, which will use its existing network to provide a uniform and affordable parcel delivery service to every address in the UK.

Five parcel delivery centres which handle Parcelforce's three day deliveries are to shut and Parcelforce depots will reduce from 101 to 51.

Consignia also plans to rationalise its air, rail and road operations to create a more efficient single network.

The programme will see four of the current 16 mail distribution centres close in the next year and a new Midlands hub built to take on work from three existing Midlands sites by the end of 2003/04.